Reports > Report on Global Development of Bike-sharing
Report on Global Development of Bike-sharing
author: Cheetah Lab 2018-04-16

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Foreword:


Bicycles were invented more than 200 years ago. Because bicycles are easy to use and do not consume any energy, they have always been popular with people. It is estimated that the global demand for bikes is approximately 110 million per year, bicyclists are roughly 15% of the total population, and the total number of bicyclists exceeds 1.1 billion.


With the improvement of technology and the emergence of new transportation options, traditional bikes have showed signs of gradual decline. In contrast, the emergence of dockless bike share is propelling the global bike-sharing sector to a second boom.


China is a major powerhouse in bike manufacture, consumption, and export and a leader in the global bike share sector. In 2017, ofo and Mobike, two behemoths of Chinese bike share industry, launched their overseas expansion, changing the dynamics of global bike-sharing sector.


Cheetah Lab scrutinized the development curve of the global bike-sharing market, analyzed the major bike-sharing markets in the world, and delved into the leading brands and companies that represent the industry so that we can present the competitive dynamics of the global bike-sharing market and forecast development trends, opportunities, and challenges of the future bike share sector.


Note: (1) The term “bike share apps” and “bike share industry” mentioned in this article refers to dockless bike-sharing apps and dockless electric-bike share apps. (2) Cheetah Data , the global mobile big data analysis platform,analyzes the huge amount of data accumulated through Cheetah Mobile’s product matrix.  Cheetah Mobile has nearly 600 million monthly active users (MAUs). 75% of the users are from markets outside of China. Cheetah Mobile’s coverage reaches more than 200 countries and regions.

 

Part I.  Overview of the Global Bike Share Industry

1. Development timeline of the global bike share market

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The Development Timeline of the Global Bike Share Market shows that compared to countries in Western Europe and North America, Chinese public bike programs had a late start, but China has leveraged economic opportunities to overtake the bike share sector. In the past decade, China’s bike share industry evolved from introducing foreign public bike programs to China, to the emergence of bike-sharing companies, and then to the innovation of dockless bike-sharing via the Internet.


Bike-sharing users can find bikes nearby via smartphone apps, then, scan a code to unlock the bikes via the apps, and park the bikes anywhere at any time.  Bike-sharing not only promoted the transformation of the bicycle industry from a traditional model to a more service- and intelligence-driven model, but also sparked new ideas in the development of mobile internet because bike-sharing presented a new economic model where online merges with offline (OMO).

 

2. Rankings of bike-sharing apps in the world

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In China, ofo and Mobike account for more than 90% of the bike-sharing market, securely locking in the top two positions in the country. At the same time, the companies listed at the bottom of the rankings kept falling off the chart during the 2nd half of 2017.  Based on the Weekly Active Penetration Rates collected by Cheetah Data, Chinese bike share market has entered the era of “Two Oligarch.”

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According to 2017 Top Apps in China, a report published by Cheetah Lab, the active user penetration rate of Chinese bike-sharing sector increased by more than six times in 2017.  In 2017, ofo and Mobike, two titans of the industry, experienced wild growth and competed fiercely. Cheetah Data showed that ofo’s Weekly Active Penetration Rate was higher than Mobike’s the majority of the time.  So far, ofo has maintained a Weekly Active Penetration Rate that is 1.3 times as high as Mobike. Since the end of 2017, the Weekly Active Penetration Rates of bike-sharing companies have all dropped, due to the winter weather conditions.


In 2017, ofo and Mobike extended their competition from China to overseas.  Based on publicly available data, as of the end of 2017, ofo’s yellow bikes had appeared in 21 countries and more than 250 cities while its rival Mobike launched services in 11 countries.  Similar to their domestic performance, the two companies also topped the rankings of bike-sharing apps overseas.

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Cheetah Data indicated that in the overseas markets, the top bike-sharing app is the ofo Overseas Edition, specifically designed for releases outside of China.  Mobike is in second place, having a similar Weekly Active Penetration Rate with Singapore-based bike-sharing company oBike, which is ranked third. Gobee.bike, based in Hong Kong, China, and U.S.’ LimeBike made it into the top five rankings.  However, Gobee.bike and LimeBike are far behind on Weekly Active Penetration Rate compared to the top three apps. Therefore, we can draw the conclusion that in the global market, Chinese bike-sharing companies are the market share leaders.

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Based on Cheetah Data’s Trend of the Top Three Bike-sharing Apps’ Weekly Active Penetration Rates in Overseas Markets in 2017, ofo Overseas Edition showed the strongest growth in the second half of 2017.  As ofo expanded into more countries, the market share of ofo Overseas Edition also rose quickly.  Mobike’s Weekly Active Penetration Rates maintained their growth overseas. Mobike even surpassed Singapore’s oBike at the beginning of this year and replaced oBike as second-ranked app.


3. Chinese bike-sharing sector, benchmark for the global industry

 · “The hottest in the world”

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From Cheetah Data’s World Active User Heat Map of Bike-sharing Apps, the Asian market, which is dominated by China and Singapore, is the hottest bike-sharing area in the world. The European market, led by U.K., France, and Italy, is lukewarm.  The American market is starting to heat up.

 

· Development curve of Chinese bike-sharing sector affects the world

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Information provided by Cheetah Data also showed the dominant effect of Chinese bike-sharing sector on the global market. From the above figure, the changes of the Weekly Active Penetration Rate of the global market over time are consistent with Chinese market. The development curve of the Chinese bike-sharing market directly affects the global bike-sharing market.


The Weekly Active Penetration Rate of the global bike-sharing market soared in 2017, with the highest increase reaching 1,258%.  From the end of last year to beginning of this year, as the winter of Northern Hemisphere gets colder, the number of active user of Chinese bike-sharing market decreased and so did the global market.

 

· Foreign venture funding vs. domestic venture funding -- a tale of ice and fire

Cheetah Mobile learned from publicly available data that global bike-sharing services received 4.267 billion U.S. Dollars in venture funding in 2017, of which 4.142 billion U.S. Dollars were raised by Chinese bike-sharing startups.


The huge contrast between the levels of enthusiasm toward bike-sharing from foreign and domestic venture capital investors can be described as ice versus fire.  At the top of the heap of Chinese bike-sharing startups are ofo and Mobike. Ofo raised $866 million in a Series E round of funding led by Alibaba in March 2018, while Mobike has recently been acquired by Meituan-Dianping, a provider of on-demand online services in China. In contrast, the majority of overseas startups are stuck on or before the Series A funding round. The total amount of venture funding for overseas startups has been left in the dust by funding for domestic startups.

 

4. Scale of global bike share users

Bike share services have set off a business boom globally with more than 1,000 companies getting involved in the industry. The large number of users in Chinese market and the growth potential of overseas markets are the biggest drivers of this boom.

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In 2017, the number of global bike share users reached 227 million. Cheetah Data predicts that in the next two years, the number of global bike share users will continue to rise and is expected to reach 306 million in 2019.  Quan Jing, executive dean of Cheetah Lab, stated that the global bike-sharing market, especial the overseas markets, still have plenty of room to grow, with Chinese companies as the vital driving force.

 

Part II.  Development of Bike-sharing Sector Overseas


Contrary to the national popularity of bike-sharing in China, one of the characteristics of overseas markets is that it is distinctly regional. Especially in countries in Western Europe and North America, municipal regulations, geographical environment, and local residents’ transportation habits all influence the releases and operations of bike-sharing services. Therefore, the bike-sharing services concentrate their launch sites in certain urban areas and regions regardless of whether the service providers are domestic businesses or Chinese companies operating overseas.


Ofo has expanded into twenty foreign countries, focusing on territories such as Singapore, the U.K., France, Thailand, Italy and the U.S.  Singapore was also chosen by Mobike as its launch pad overseas. Another country with a large number of Mobike active users is Italy.


1. Asian markets: Singapore bike-sharing market is the most active

· China’s ofo and Mobike rank higher than Singapore’s oBike

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Asia is a vital market for bike-sharing businesses. Outside of China, Singapore market is the most active in Asia.  Cheetah Data’s rankings of bike-sharing apps in Singapore indicate that there are three native Singapore bike-sharing companies: oBike, SG Bike and Gbikes. Both China’s ofo Overseas Edition and Mobike have better Weekly Active Penetration Rate and Opens Per User than Singapore’s own bike-sharing apps. The Weekly Active Penetration Rate of ofo Overseas Edition is more than three times as high as oBike. Further, because ofo China Edition can be used overseas too, even the China edition has a Weekly Active Penetration Rate of 0.0155%, ranked 5th on the chart.  

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The number of Singapore bike-sharing users grew rapidly in 2017. The Weekly Active Penetration Rates of ofo and Mobike went straight up in the 2nd half of the year.  Since September of 2017, the Weekly Active Penetration Rate of ofo Overseas Edition has increased nearly 9 times.

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oBike

As the strongest local brand in Singapore, oBike has many similarities with China’s ofo and Mobike. Both are equipped with smart locks. The initial deposit for using oBike’s services is 49 SGD (roughly 238 RMB). The users are charged 1 SGD per 30 minutes.  Both the deposit and cost for one ride are higher than Chinese bike-sharing services.

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Obike App Interface

 

· Thailand

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Presently, only ofo, Mobike and Sigapore’s oBike operate in Thailand. The dominance of ofo Overseas Edition in the Thailand bike-sharing market is apparent. The Active Weekly Penetration Rate of Mobike and oBike are pretty far behind of ofo.

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Cheetah Data showed that ofo, Mobike and oBike launched in Thailand around the same time, but ofo Overseas Edition enjoyed rapid growth and quickly widened the gap between itself and the other two apps.


· Cultures and policies in Asia are suitable for developing bike-share services


Due to similarities among cultures in Asia, bike share companies can use the experience in China for reference when they launch their businesses in other Asian countries and regions.  The majority of countries in Asia has a long standing tradition of riding bikes but has yet to regulate the bike-sharing industry.  In Singapore, which is popular with bike-sharing companies, local governments offer support for the overall development of bike-sharing industry by signing agreements with operators and focusing on developing regulations to resolve issues such as parking.  In addition, there is an enormous population in the Asian markets, providing favorable conditions for the bike-sharing industry. Many companies fiercely compete for the Asian markets.

 

2. Europe:  Italy has the fastest growing bike-sharing sector; France’s dock-based bike share is still going strong

· Italy

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Italian bike-sharing sector is experiencing the fastest growth in Europe and is a major battleground for Chinese bike share companies that are expanding outside of China. On the rankings of bike-sharing apps in Italy, published by Cheetah Data, Mobike app tops the chart, ofo Overseas Edition comes in second, and Singapore’s oBike ranks third. Gobee.bike, based in Hong Kong, China, is in fourth place.

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According to Cheetah Data, major bike-sharing operators that are currently active in the Italian market all launched their businesses in Italy during the second half of 2017.  Mobike and ofo launched a bit earlier than the rest of the group and rapidly gained active users. However, since November 2017, both companies’ Weekly Active Penetration Rates have been declining, due to less people riding bikes in the winter in Italy.


· Afternoons and evenings are peak times for bike-sharing services in Italy

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According to Cheetah Data, between 2pm to 7pm is the peak time for bike riding in Italy.  This is quite different from Chinese bike share services’ peak times, which are during morning and evening rush hours. This phenomenon indicates that in some regions outside of China, bike share services might be transitioning from providing a necessary transportation means for commuters to offering a way to experience leisure and life.


· Visitors are potentially new users; the Greater Milan area plans to unify bike-sharing regulations


Most regions in Italy have mild weather. Therefore, Italy is frequented by a considerable amount of visitors, who are potentially new users.  However, a disadvantage in developing bike share business in Italy is that Italy has many old towns with narrow paths, which are not suited for riding or parking bikes.

So far, municipal governments in Italy have not issued any regulations on bike-share programs. However, the Greater Milan area, including Milan and neighboring cities and towns, proposed a unified plan to regulate bike share programs. Ofo and Mobike can operate outside of the urban areas of Milan and in some cities and towns near Milan.


· France

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According to Cheetah Data’s rankings of bike-sharing apps in France, ofo Overseas Edition tops the rankings, but Mobike is only in 5th place with a merely 0.0004% Weekly Active Penetration Rate.


Gobee.bike, based in Hong Kong, China, also operated in some regions in France. However, a recent report by TechCrunch stated that Gobee.bike already pulled out of France due to mass destruction and theft of its bikes.

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According to Cheetah Data’s Weekly Active Penetration Rates of Major Bike-sharing Apps in France in 2017, ofo and oBike launched in France around the same time and both are growing. However, ofo has more explosive growth after the initial rollout, and its growth rate is also noticeably faster than oBike.


· Roadblocks from dock-based bike share companies


France has a long history of bike-sharing. In 2007, the first large-scale public bike-sharing system Vélib' (short for “freedom bike” in French) was launched in Paris.  Vélib' achieved high market penetration by offering low prices.  Currently, Vélib' has 1,750 docking stations and 23,600 bikes and offers electric bike-sharing services.


Vélib' also launched two mobile apps to make it easy for their customers.  Cheetah Data showed that the app Vélib' (official appli) is used to look for Vélib' bike or electric-bike docking stations and complete the rental transactions online. The Weekly Active Penetration Rate of Vélib' (official appli) is 0.0352% in France. Even the app Paris Velib, a tool allowing users to view the status of bike docking stations, has a Weekly Active Penetration Rate of 0.0041%.  Velib’s online penetration rate is still higher than most of the other online bike-sharing apps in France.

 

· France plans to introduce rules and regulations for bike-sharing programs


The Paris Mayor convened a meeting with bike-share operators on how to handle the abandoned and damaged bike-share bikes.  So far, several Paris government officials have publicly stated that the government will institute rules and regulations that standardize bike share operations.  For example, discussions of collecting fees for permits are ongoing. The Paris government is expecting to issue new bike-sharing regulations at the beginning of the year.

 

· The U.K.

· Ofo Overseas Edition is clearly the leader of the market; London has introduced regulatory guidelines for bike-sharing operations.

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As the first in the British bike-sharing market, ofo Overseas Edition’s advantage is evident. Other bike-sharing companies are still in the initial stage of program-rollout in the U.K.

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According to Cheetah Data, before November 2017, the Weekly Active Penetration Rates of Mobike were higher than ofo Overseas Edition in the U.K., but since November 2017, Mobike has been overtaken by ofo Overseas Edition. At the beginning of 2018, the Weekly Active Penetration Rates of ofo Overseas Edition were still rising.


Bike-sharing services in the U.K. suffer little threat from domestic companies. Traffic congestions in big cities such as London and expensive public transportation costs are contributors to the development of the bike-sharing businesses.  However, the cold and rainy weather conditions of the U.K. are not favorable for riding bikes.


So far, London has issued Dockless Bike Share Code of Practice for Operators in London, which imposes certain requirements on the operators. For example, dockless bike share programs should be introduced on a trial basis and bikes that are obstructing traffic must be timely removed.


· The U.S.

· American companies’ focus is on domestic market.

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Cheetah Data indicates that in the U.S, homegrown app LimeBike has the highest Weekly Active Penetration Rate and the city with the most active users is Dallas.  LimeBike’s founding members all came from China, originally part of Kinzon Capital’s U.S. venture capital arm. Limebike is currently focusing on the U.S. market.


Ofo Overseas Edition ranked 2nd and Mobike followed as the 3rd in the U.S. In the 4th and 6th place on the rankings are U.S.-native Spin and Ford, respectively.  Spin was established at the end of 2016 and is based in San Francisco. Spin raised $8 million in Series A venture capital financing.  Ford GoBikes was launched by traditional carmaker Ford, in partnership with dock-based bike-sharing operator Motivate.

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Cheetah Data indicates that the Weekly Active Penetration Rates of U.S.’s LimeBike rose rapidly in 2017. Mobike’s Weekly Active Penetration Rates remained stable in the U.S.  The Weekly Active Penetration Rates of ofo Overseas Edition began to surpass Mobike in October 2017 and has continued to rise.


Similar to France, the U.S. also has had an incumbent dock-based public bike-sharing company – Citi Bike – for years.  However, Citi Bike makes little impact to the U.S. bike-sharing market, reflected by both its Weekly Active Penetration Rate (presently 0.0029%) and operational situation.


Citi Bike is the product of government and private enterprise cooperation.  Citi Bike’s operator is Motivate. According to publically available information, Citi Bike still has not turned profitable despite many years in operation, losing millions of dollars a year.


· Country with the highest barriers to entry for bike-sharing businesses


In all foreign countries, the U.S. places the most restrictions on the bike-sharing sector. To establish a bike-share program in the U.S., the business must communicate with the government and obtain a permit. Many cities in the U.S. have been cautious in dealings with dockless bike share companies. New York City recently asked for public input to explore the feasibility of a dockless bike-sharing program, which will not be allowed to operate in any place where Citi Bike already exists.  In responding to this type of policies, U.S.’s LimeBike started to explore the idea of a virtual parking lot.

 

Part III. Analysis of Companies That Represent Bike Share Industry

1. Ofo’s market approach in Southeast Asia began to take shape

Currently, ofo ranks first in bike-sharing apps in the world.  Ofo also leads the pack in terms of the number of countries and regions it operates in.

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In China, ofo focuses its business in Tier 1 and Tier 2 cities.  According to Cheetah Data, ofo has the highest proportion of active users in Tier 2 cities.  However, if we consider the difference in the total population of Tier 1 and Tier 2 cities, ofo’s total number of active users is essentially higher in Tier 1 cities.

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Based on ofo User Profile, ofo’s male users account for 54.95% of its total users, a little more than the percentage of female users (45.06%).  Ofo is the most popular in age group 18-24 (27.72%) and over-40 (32.66%).  But overall, there are not big differences between age groups.

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Cheetah Data showed that 78% of ofo Overseas Edition’s active users live in Singapore. The cities with a large number of app active users are mainly located in Asia, but about 2.3% of the users are in Milan, Italy, which ranks third for the number of active users.

 

2. Mobike: Anchored in Singapore, aiming for Europe

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Mobike’s business strategy in China is fairly similar to ofo.  The rival operators’ fierce competition in Tier 1 and Tier 2 cities has led to the over-saturation of the market in these cities. Second-tier bike-sharing companies are feeling increasing pressure and have started to retreat into Tier 3 and Tier 4 cities.  

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Mobike is in 2nd place for the number of active users in foreign markets.  85% of Mobike’s foreign active users are in Singapore. Italy is another country where Mobike has a relatively large number of active users - both Milan and Florence are in the top 3.  

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Mobike’s user profile is also quite similar to ofo.  While there are no huge differences in the number of users among age groups, Mobike is more popular in the age group 18-24 and over-40.  However, 61.57% of Mobike users are male, which is more than ofo.  This might be correlated to the fact that Mobike had heavier bikes in its initial years.

 

3. oBike: based in its homeland Singapore; expanding into Southeast Asia


oBike is a Singapore native bike share company and ranks 3rd in Cheetah Data’s overseas bike-sharing app rankings. However, oBike’s penetration rate is only 10% of ofo or Mobike, which further illustrates that the popularity of bike share overseas is far less than China.


oBike is actively expanding into foreign countries and has expanded into Malaysia and Thailand in the first half of 2017. oBike also has presence in some European countries.

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Cheetah Data showed that the top 3 cities for oBike’s active users are Singapore, Kuala Lumpur and Taipei, China.

oBike’s enthusiasm for blockchain technology distinguishes itself from other bike-sharing services. oBike has previously announced a partnership with blockchain platform Tron to launch its own cryptocurrency oCoins, which users can access while cycling.  However, it appears that oBike only hopes oCoins will help boost its future payment options and attract more users to use bike share services.  oBike doesn’t plan to make profit off blockchain technology in the near future.

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oBike’s user profile also exhibits the characteristic of “heavy on both ends.”  Users aged 18 to 24 and over-40 account for 29.86% and 34.28% of total users, respectively.  However, oBike’s users aged 25 to 30 only account for 10.24% of its total users, less than ofo and Mobike.


4. LimeBike: Deep-rooted in the U.S.


LimeBike, an American bike-sharing company, currently ranks 1st in regards to active penetration rates in the U.S and 5th in the overseas biking-sharing app rankings.  LimeBike covers 20 cities and campuses in the U.S. with a fleet of more than 10,000 bikes.  Generally, the number of bikes launched by a Chinese bike-sharing company is in the scale of hundreds of thousands, which dwarfs LimBike. This phenomenon reflects the policy difference between the U.S. and China.


LimeBike doesn’t collect deposits from users, a different approach from aforementioned bike share companies. However, LimeBike encourages users to prepay for their services. Similar to a rechargeable prepaid card, users add money for 5 to 10 rides each time.  This approach not only avoids the grey area of handling deposits, but also improves customer experience.

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Another distinction between LimeBike and Asian bike-sharing apps is the age-group distribution in their user profile. Asian bike-sharing apps have the shared characteristics of “heavy on both ends” while 18-24 year-old (accounts for 41.25%) male (accounts for 66.54%) is a noticeably predominant user group.

 

· Similar development paths, different destinations


Reviewing the leading brands of the global bike-sharing sector, we found that they have the same business model – deposit + rent (except for LimeBike).  However, increasingly, bike share companies roll out deposit-free or rent-free programs. The tightening of deposit regulations is another contributor forcing the companies to reconsider their source of income in order to turn profitable.


Domestic and foreign bike-sharing companies all targeted markets that are culturally similar to their own to establish new business.  However, overall, China’s bike share companies with their extensive experiences in Chinese markets quickly gained market shares overseas, even leading the market in some regions.  However, for foreign bike share companies, even if they launched business in their own countries, they rarely grew to the level of monopoly.  In addition, foreign bike share companies receive far less funding than Chinese companies, therefore, their growth in other countries are also slow.


To certain extent, the gaps between the penetration rates created different user profiles for different bike-sharing apps. Asian bike-sharing apps’ penetration rates are higher than countries that share Western culture.  Bike share companies that are immersed in Asian culture feature a higher proportion of young and over-40 users. For the bike-sharing companies that are influenced by Western culture, their penetration rates are generally not high, the majority of their users are young people who are more open to new things, and the users aged over-40 no longer have any predominance.

 

Part IV. Future of the Bike-Sharing Sector

1. Market space: growth potential of the overseas bike-sharing sector is worth waiting for


As previously mentioned, according to the data examined by Cheetah Data, the global bike-share sector is dominated by China. In 2017, China’s bike-sharing industry stopped expanding at an explosive rate and had entered into a period of steady growth.


In contrast, overseas markets still have room for rapid growth.  Taking out Mainland China, Hong Kong, China, and Taipei, China, from the evaluation of the weekly penetration rates, we discovered that overseas bike-sharing sector began in March 2017, falling far behind Chinese bike-share sector.  The overseas markets remained stagnant long after their launches. It was not until the end of September 2017 that the overseas markets finally experienced their first surge of growth -- their weekly active penetration rate rose by 2440% in three months.  

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In the next two years, China’s bike-sharing sector will further its expansion in markets outside of China. Cheetah Data predicts that the overseas bike-sharing sector has room to grow to 5 to 10 times its current size.  However, if Chinese companies want a slice of the pie, they will encounter many obstacles in the overseas bike-sharing sector.


The first obstacle is foreign policy environment.  Municipal government administrations in Europe and the U.S. are rather strict.  It will be difficult for a dockless bike-sharing company to do what it is used to in China – flooding the market with thousands or even tens of thousands of bikes -- without any trouble.  As previously mentioned, the U.S. is the most difficult market to break into.  Unlike the Chinese markets, many cities in the U.S. have adopted the approach of establishing regulations before launching bike sharing programs.  For example, San Francisco’s municipal government issued an 18-month trial period for Jump, a bike share company. During that time, other brands are not allowed to enter the market. The routine in China, “launching bikes before regulating,” probably won’t work in the overseas markets.  However, we noticed that China’s bike-sharing companies have quickly adapted to the new policy environment.  In August 2017, ofo received a permit from Seattle's transportation authority to become the first Chinese bike share company that operates in the U.S.


The second obstacle is competition within the sector. Many European and North American cities have a long history of public bike-sharing services, such as New York’s Citi Bike and France’s Vélib'. Most of these bike-sharing programs received government support.  For example, Citi Bike recently signed an exclusive operation contract with New York City, good until 2029.  


However, Chinese bike-sharing companies have their advantages too. First, China has an advantage in its supply chains. The cost of manufacturing bikes in China is a lot lower than overseas. Second, Chinese bike-sharing companies have more experience with a fiercely competitive environment. It is rare that bike share startups in the U.S. would have to fight over one project like a pack of hungry wolves. Chinese bike share companies have more practice with competition and business operations. Third, European and North American markets definitely have a smaller volume of bikes than China. However, each of their users provides higher value. For example, LimeBike’s bike rental price is 1 US Dollar/hour, much higher than China’s 0.5-1 RMB/hour.


2. Profitability reform: the expected arrival of advertising and big data


As previously mentioned, the profit model of bike sharing programs -- deposit + rent -- is confronted with challenges. Therefore, many Chinese companies are exploring new ways of making profit.

Overall, bike-sharing programs have four profit models: ad revenue, big data services, financial services, and value-added services. Bike-sharing financial services, especially the handling of deposits, are encountering increasing government scrutiny. Liquidity of deposits is subject to restrictions.


· Ads on bikes: targeted ad placements based on local demographics


Placing ads on bikes is currently the most profitable model.  The key of an ad is its advertising effectiveness. If an ad takes into account the big data provided by bike-sharing platforms (for example, bike share programs partner with Location-based Services (LBS) to provide users with commercial activities and discounts in the users’ vicinity), then it can reach a large audience and target local demographics, which is very attractive to advertisers. oBike once indicated that bike share cannot only rely on rent to make money.  Teaming up with its partners, oBike utilizes a variety of platform resources and integrates user usage scenarios and geographic locations to sell and promote ad placement.  

 

· Big data service: providing support for ads or public services


Big data is widely viewed as a good way to make money.  Bike-sharing companies can install positioning systems in the bikes to collect a large amount of short-distance ride data. Without infringing user privacy, the bike-share companies can sell ride data to a third party, leverage the information for marketing, collaborate with governments to establish big data that can serve the public, or use the data for any number of opportunities still to be imagined. The experiences of bike-sharing companies in cities around the world tell us that local governments all have strong interests in bike-sharing operational data and are seeking access from the operators.  Collaborating with governments on bike-sharing infrastructures has become a basic requirement for bike-sharing operators.

 

· Blockchain /e-commerce: will capturing the opportunity and thinking outside of the box help the bike share sector find the next gold mine?


At last, some bike-share companies are experimenting with business integration of blockchain technology, exploring new possibilities.  However, as aforementioned, the current blockchain technology is just a buzz word in the bike-sharing sector. Not only it is unclear whether employing blockchain will improve profitability, but also it is difficult to demonstrate whether blockchain offers any beneficial function or provides better experience.


Certainly, there are some bike share services that began to try value-added services, such as selling brand-related souvenirs.  This marketing approach applies the same model behind QQ memberships, but it is questionable whether it is suitable for bike-sharing.  After all, bike-sharing is designed for solving the last mile problem. For an ordinary city dweller, how to get there is the most important thing, not how to display personality.

 

3. Vertical integration:  mobile ride-sharing sector takes the next step


Whether at home or abroad, it is true that rideshare and bike-sharing have become intertwined with each other.  In China, Didi invests in ofo and Mobike partners with Shouqi Limousine & Chauffer.  Bike share startups’ love and hate relationship with the titans of the industry continues to spin out tales that people relish.


Outside of China, well-known rideshare services such as Ola and Grab also started to offer bike share services.  At the end of last year, Indian ride-hail player Ola launched its own bike-sharing service, Ola Pedal.  Ola seems to plan to imitate ofo’s practice in China and limit the initial launch to a number of university campuses. Grab, a popular rideshare service in Southeast Asia, plans for a joint service with oBike in Singapore. It has been reported that the new service will be called Grab Cycle, but both companies declined to comment.


Uber is also piloting a bike-sharing service in the U.S.  An Asian market executive of Uber revealed as early as last year in an interview that Uber was considering adding bike-sharing services.


Cheetah Lab (ID: Cheetah Global Lab) stated in its 2017 Mobile Ride-hailing Market Report that the bike-sharing and internet car-hailing are both essentially mobile-ride services.  Combining the two services will not only meet users’ needs, but also is the overall trend of the transportation sector.  The future competition of bike share companies might transform to a competition between integrated rideshare platforms.


 Data Explanation:


1. Unless otherwise stated, data are provided by Cheetah Data (cn.data.cmcm.com), a mobile data analysis platform. Cheetah Lab leverages the data to provide users with more authoritative and informative mobile internet reports.


2.  Data are collected through the normal use of Cheetah Mobile products in accordance with all relevant laws and regulations.


3.     Data are influenced by the scale and locations of Cheetah Mobile users.

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Copyright ownership of data, conclusions, images, graphics and other components in this report belongs to Cheetah Data.Any media, websites, individuals or organizations share not be uploaded, posted, modified, distributed, reproduced, or used in other ways without permission.

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